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A Guilty Victim

03/15/2012

Last Friday, the Department of Labor released the all-important monthly Jobs Report.  Generally, it was better-than-expected, with 227 thousand jobs being created.  (This morning, High Frequency Economic,whom I respect, predicted over 300 thousands being created monthly by late Spring?)  Our U.S. unemployment rate did not drop, remaining at 8.3% of the workforce, because so many previously-discouraged people had re-joined the workforce to look for a job.  Otherwise, it would have dropped.

That afternoon, I read an economic report on Greece.  You know, that is the guilty country who led Europe in the current abyss with its high social safety net and no way to fund it, except for borrowing.  They were flatly irresponsible!

However, they are now facing 21% unemployment, and it is rising rapidly.  During the Great Depression, the U.S. unemployment rate was 25% for only a few months.  Greece will clearly exceed the U.S. rate.  Among young people, the unemployment rate is a volatile 51%.  (Keep it mind, that is the age group most likely to take to the streets and do something stupid.)  Their GDP fell a staggering 7.5% in the last quarter and is still dropping.  As I have written several times, if you have friends or relatives living there, send them a one-way plane ticket.

But, immigration is another problem for them.  Currently, Greece belongs to a pact of European nations that allow free movement between countries.  Unfortunately, Greece is the “Texas” of the European Union with a long, porous border between it and Turkey.  France, which is being over-run with Muslim immigrants, has threatened to withdraw from the pact if Greece does not stop the flow of Muslims into Europe.  With what resources?  Maybe, the unemployed could stand linked arm-in-arm on the Turkish border?

There is a price to be paid for being irresponsible!  Unfortunately, it is not paid by those who can afford it.  The average person gladly received the benefit of a lavish social safety net but must now suffer the collective aftershock.

The first step for Greece was to embrace austerity, which they are finally beginning now.  The second step is to promote growth, which means to liberalize business restrictions, which they must also start immediately.  When  the Greeks emerge from this long prison sentence to Hell, they will be a far better nation.  Guilty or not, I wish them well!

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